(Reuters Point Carbon) - California's seventh-largest city may try to bolster its strained budget by maintaining its 393,000-tree urban forest and selling carbon credits to regulated greenhouse gas emitters in the state's forthcoming cap-and-trade program.

Long Beach Councilwoman Gerrie Schipske said Tuesday she will ask the city's office of sustainability to review her proposal to enroll its urban forest as an offset project that can supply credits to California's carbon market.

Planting and maintaining forests in urban areas is one of four ways emitters can offset their greenhouse gas output, according to California's cap-and-trade regulations.

Schipske told Reuters Point Carbon that she will ask the sustainability office to take an inventory of the city's trees and carbon emissions, and calculate how many carbon credits the project can generate.

The councilwoman said she wants Long Beach to be an early player in California's burgeoning carbon offset market, and to take advantage of the revenue it can earn -- especially in light of tight economic conditions.

Local newspaper The Press-Telegram said Long Beach has a projected $17.2 million budget deficit for the next fiscal year and has planned to slash a $227,703 from its tree-trimming budget.

But Schipske said the city can use carbon credit revenue to cover the costs of tree maintenance without dipping into the budget.

Long Beach would follow in the footsteps of the beachfront city of Santa Monica in western Los Angeles if it registers its urban forest as a carbon offset project.

Santa Monica has listed a project in the Climate Action Reserve (CAR) - an offset registry that will become an accredited registry for California cap-and-trade program - that aims to add 1,000 trees to its urban forest.

Long Beach is more than four times the size of Santa Monica and has a population that is five times larger.

SUPPLY SHORTAGE

California's market will allow emitters to use offset credits to fulfill up to 8 percent of their compliance obligation, creating demand for up to 208 million credits by 2020.

Most market analysts have predicted the supply will be insufficient, especially in the cap-and-trade program's second phase, which will start in 2015.

Gary Gero, president of the CAR, said the registry has reached out to Long Beach officials to encourage it to convert its forest into an offset project.

He said the credits could help fill "anticipated supply shortages in California cap and trade, especially in second phase."

"Tree planting programs have a wide range of benefits and offsets are just one part of that," Gero said, noting that they will help combat heat and air pollution, among other benefits.

"These are trees that are going to generate credits over their life so the payback is long term," he said.

Gero said other cities, in states such as Rhode Island and Maine, have expressed interest in registering urban forest offset projects under the CAR.